At E-lending.co.uk, we have found a number of lenders who have
0% interest or very low interest cards. Christmas 2000 saw the introduction of the first low interest credit card in the UK when online bank Egg started charging no
interest on debts that were transferred to new Egg cards as a special offer.
This type of promotion became popular and and now there are loads of
“0% on balance transfers” cards available. Most have a “zero
interest” period of five or six months, but the Best Buys and
market-leading offers extend this period to nine months or even a
year. The average cardholder has an outstanding balance of about
£1,500, so there are huge savings to be made from switching debt
from a card charging, say, 22% APR to a 0% card. So, provided that your credit
rating is OK, switching balances from an expensive card to a 0% card
should be straightforward. You may find that the card provider asks you
to make a list of your balance transfers on the application, although some allow you to provide this information later on,
either online or by telephone.
Some cards offer introductory 0% interest on purchases too.
If not, be cautious about using your new card for anything but
balance transfers until you have paid off the original transfer in
full. Otherwise you may find that you are being charged
interest because the card issuer will use any payment you make to
cover the balance transfer FIRST...meaning any purchases get charged
at the normal interest rate.
